Why Putting Your Money in a Bank Is Better Than You Think

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Yup! The mainstream media may be caught up on this, but here's the real story This could be the biggest scandal the medical world has ever witnessed. CRISPR, the revolutionary gene-editing technology, has taken the world by storm for all the wrong reasons. But behind this scandal lies a 28,700% revenue surge forecasted for this tiny company. June 29, 2019 Why Putting Your Money in a Bank Is Better Than You Think By Tim Melvin Dear Reader, As we skip off into the weekend, I just wanted to take a second and touch base with you on a very important subject, one that can put tens and even hundreds of thousands of dollars in your pocket over the next few years. Of course, I can only be talking about bank stocks. I can see people's eyes glaze over when I mention bank stocks. "Tim," I frequently hear, "My Grandma owns banks stocks. I want that exciting, sexy stuff I hear about on CNBC and read about online." First, my congratulations to your Grandma. She has most likely built up a sizable chunk of change for herself over the years. Bank stocks bought right have been a powerful source of returns over the past for most of my career. In fact, I have made more money for myself, investors, and readers in banks stocks than any other sector of the stock market. It Isn't 2008 Anymore "But banks are risky. Just look at 2008-2009. The banks were a disaster, weren't they?" Yeah, they were. However, my strategies use pretty rigorous criteria, so none fit the bill, and we were pretty much out of the bank stocks at that time. We started selling in 2006 when takeover multiples cruised over 2.5 times book value, and loan losses were beginning to shoot higher. The one bank strategy I have that tries to stay fully invested only dropped a little less than the S&P 500 in the bear market, and recovered a lot quicker than the broader market. Over the last 20 year, it has a Beta of 0.45, which tells me this bank stock strategy has been less than half as risky as owning the intellectual snobs that endorse index funds have been. Smaller banks have a powerful tailwind that will keep pushing them higher for a very long time. In banking, size matters. The bigger your bank, the more scale you have, and the easier it is to manage costs. Smaller banks have a tough time keeping up with the ever-rising costs of things like regulatory compliance, and technology. This makes them a bit more open-minded when a larger bank looking to grow comes along with an offer to buy them at a much higher stock price. They can't afford to compete, so they ring the bell and cash out. Those of us smart enough to identify and buy the target in advance cash out right along with the insiders. Why would the big banks do that? It's simple, really. We live in a 2% growth world, and that's not going to change anytime soon. It's almost impossible to grow in an industry where the ten largest banks control most of the market, and the economy is just crawling along. However, you have shareholders who want to see growing earnings, rising dividends, and all those wonderful things that push stock prices higher over time. So, the easy answer is to buy a smaller bank, cut cost (on average by about 30%) and grow your bank that way. But Does It Work? If you bought shares of Bank of the Ozarks, now Bank OZK (NasdaqGS:OZK), back in June of 2000 and held it until today, you would have racked up gains of more than 3,750%. A single $10,000 block of stock would be worth more than $385,000 today. They have been an active acquirer of small banks, and have used deal-making as a very effective growth strategy. I think those shareholders are happy, don't you? Buying a takeover target that is acquired by a larger bank, that is then itself acquired by a larger bank, can grow money at a fantastic rate ovear time. I have seen several people turn modest amounts of money and turn it into a sizeable sum using precisely this approach to investing in bank stocks. I have spent a lot of time figuring out what works best when investing in bank stocks, and we are going to talk about these strategies over the next couple of weeks. There is a reason wildly successful investors like Warren Buffet, Charlie Munger, and Michael Price own a lot of bank stocks. I'm going to teach you what that reason is, and how to make it work for you. By the way, if your granny really does own bank stocks, you should probably call her more often. To the Max, Tim Melvin P.S., Earlier this week, Shark Tank's Robert Herjavec made it known to a very exclusive audience that "The walls have finally come down" on one of America's most exclusive investing opportunities. Now the world of private, startup investing that until recently had only been available to the seriously wealthy is open to the average American. Robert and his partner Neil Patel made a special presentation earlier this week that show you how these small startups can jump into valuations into the billions and create game-changing wealth. You can find out more about it by clicking here. Here's what else I'm following... It's now or never (if you want a shot at a crypto fortune, you better act now) Whether you like it or not, cryptocurrencies are turning the investing world upside-down... and you can either stand idly by while it takes off, or learn how to claim a piece of this historic cash grab. There's an enormous amount of money in play for ordinary folks - and if you want a shot at a crypto fortune, you need to strike now. Go here to see what our expert has to say... You are receiving this e-mail at, its028@gmail.com, as a part of your free subscription to Tim Melvin's Max Wealth. 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